Forecast Of The Day: Discover’s Card Balance Outstanding
What?
Discover (NYSE:DFS) Card Balance Outstanding – the dollar value of the company’s credit cards loans outstanding – declined from $73 billion in 2019 to about $70 billion in 2021. Trefis expects the metric to rise to $71 billion in 2022 and to about $74 billion in 2023.
Why?
- Discover Financial Stock Is Fairly Priced At The Current Levels
- Discover Financial Stock To Edge Past The Revenue Consensus In Q1
- Discover Financial Stock Is Attractive At The Current Levels
- Discover Financial Stock To Beat The Earnings Consensus In Q4?
- Is Discover Financial Stock Attractive At The Current Levels?
- Is Discover Financial Stock Fairly Priced?
The lower balances through 2020 and 2021 were due to weaker spending earlier in the pandemic and the potential impact of the U.S. stimulus which drove higher levels of pay downs.
So What?
With balances slated to rise and interest rates also trending higher, we expect Discover’s net interest revenues to improve. We value DFS stock at about $144 per share, 31% ahead of the current market price.
See Our Complete Analysis For Discover
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| Returns | Mar 2022 MTD [1] |
2022 YTD [1] |
2017-22 Total [2] |
| DFS Return | -11% | -5% | 53% |
| S&P 500 Return | -3% | -11% | 90% |
| Trefis MS Portfolio Return | -4% | -14% | 239% |
[1] Month-to-date and year-to-date as of 3/16/2022
[2] Cumulative total returns since the end of 2016
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